Videocon Mobile to soon roll out 4G enabled handsets

Videocon Mobile Phones, the handset brand of the $4 billion Videocon Group, is mulling a rollout of its fourth generation (4G)-enabled mobile phones in the next couple of months, a top official said.

"We are working on 4G enabled handsets and it will be out in the next two months," Videocon Mobile Phones chief executive officer Jarold Pereira told IANS.

However, Pereira could not quote a price for the 4G device. He said the company will manufacture 4G handsets going by the requirement.

"There are other operators who are planning to launch 4G services soon. We do not want to miss out on the opportunity. If we roll out our own handset during that time, we can go for bundled offers," Nikhil Garg, sales head (North), Videocon Mobile Phones, told IANS.

Videocon Telecom said Feb 19 it is all set to invest over Rs.1,200 crore ($193 million) in the next three years for 4G rollout in 29 cities. The service will be rolled out in three circles in UP East, UP West and Bihar, the company had said earlier.

"We can also go for bundled offers with our own services," Garg said, adding: "The company has set a sales target of six million handsets per month by 2016."

Saying that the company's mobile phone business is still at a nascent stage, he added: "It is five-year-old. We started manufacturing mobile phones from our two factories at Aurangabad and Kashipur (Uttaranchal) a year back. Around 100,000 units are manufactured every month in both feature and smartphone category ranging between Rs.800-900 and Rs.5,000."

Pereira added that the company is also planning to start a mobile manufacturing unit in South India in one of its existing units within a couple of months but declined to disclose the location. "We are planning another mobile manufacturing line in the south. Hopefully it will be operational within two months."

Garg rued that the ecosystem in India is still not there for end-to-end manufacturing of mobile phones. It is more of assembling and some bit of manufacturing.

"But we will be focussing more on manufacturing now as making it here is set to become more economical than importing from China," he added.

The mobile handset industry is expecting that the government will increase the customs duty on imported handsets from the current seven percent to double digits. That will also help the government to promote its Make in India programme.

"We have the expertise in manufacturing. We make all our white goods in India from 17 factories across the country," Garg said.

Asked about the planned investment for enhanced manufacturing, Pereira said: "We have established factories and we do not have to build factories for mobile manufacturing. Hence there is no such separate investments."

The mobile handset industry is growing at 10 percent compound annual growth rate (CAGR). This could also be Videocon's growth engine for its brand.

Videocon Mobile has a strong presence in Uttar Pradesh, Rajasthan and Punjab. It is also planning to focus more on the eastern zone (West Bengal and Bihar), western zone (Gujarat and Maharashtra) and southern zone (Andhra Pradesh, Telangana and Karnataka).

The pan-India market size of mobile handsets is 20 million units per month. The company has a full-fledged sales team with 800-850 direct and micro dealers.

(Aparajita Gupta can be contacted at aparajita.g@ians.in)